Ever since Bank of America announced its mortgage putback settlement with Fannie and Freddie on Monday the company’s shares have been on a tear — an indication that it did very well in the negotiations, which allowed it to settle for pennies on the dollar.
Obviously critics are freaking out (the critics include politicians, like Maxine Waters).
And now Bank of America has basically confirmed that the critics are correct: It was the beneficiary of a bailout.
According to Bloomberg, BofA’s Jerry Dubrowski said: “Our agreements with Fannie Mae and Freddie Mac are a necessary step toward the ultimate recovery of the housing market.”
Get it? This was not about settling mortgage putback exposure at the legal level. It was about helping the greater good. It’s the same too-big-to-fail logic all over again: What’s good for Bank of America is good for America.